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Oil in Kenya?

Two weeks ago, French oil multinational Total said it had acquired five offshore oil exploration blocks in the Lamu basin, joining a list of other giant firms that are eyeing openings in Kenya’s oil exploration.

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Although Kenya is yet to give a formal indication of where its exploration programme, which now involves half a dozen companies, is headed, in recent weeks, well-placed sources in Uganda’s oil industry have suggested that the country is on the verge on making an announcement that could cement East Africa’s position as major oil region on the continent.

Undoubtedly Kenyan policymakers are paying close attention to developments in neighboring Uganda, where the politics of oil have already become complicated:

Over 160 MPs have signed a petition to call a special session of Parliament to discuss the oil agreements Government signed with exploration companies.
The chief petitioners MPs Abdu Katuntu, Theodore Ssekikubo and shadow minister of Energy, Beatrice Anywar, argue that from exploration to near production now, there has been secrecy and there was need to break it.
Commenting on the Petroleum Bill, MP Abdu Katuntu, said it is being influenced by international companies.
“The Petroleum Bill is still at consultative level, but even at this stage, international companies have started coming into the country and they are trying to influence it,” Katuntu said.
“We know their thinking. It shows you that Africa and Uganda in particular is in a big problem”.

Another development Kenyan policymakers may be watching is Uganda’s dispute with Tullow:

Uganda is contesting a key provision of its current oil agreement with the UK-based Tullow Oil in the latest dispute to delay the long-discussed $2.93 billion sale of its stake in three oil blocks to French oil Total SA and China’s CNOOC.

The discovery of oil could be a thrilling development for Kenya, but it will likely also introduce new political problems for the country, both in terms of domestic politics and relations with outside investors. As the example of Ghana shows, oil discoveries trigger new conversations about transparency, policy, and how oil wealth is spent. Kenyan policymakers have a lot to ponder before the year’s end.